Cross lease ownership places certain restrictions on each owner in relation to the improvements or alterations they may wish to undertake on their property and requires you to obtain written approval from the other cross lease owner or owners. It could be as simple as adding a deck, erecting a carport, or building a pergola near the BBQ.
A fee-simple title provides you with significant benefits when it comes to selling or developing your property as you have full ownership of the land. In fact, the Property Institute of New Zealand estimates homeowners of fee-simple title properties may achieve a sale price of 7 to 18 per cent above that of a cross lease title. This increase in value may be due to the greater potential for development opportunities, and also to the fact that many New Zealanders prefer a full ownership structure. There is also a perception that cross leases can be complicated, deterring potential buyers and limiting the buyer market.
In order to convert a cross lease to a fee-simple title, there is a process that has to be adhered to and Councils have become very familiar with converting cross lease titles to fee-simple titles. The Auckland Unitary Plan (AUP) has made what was once a complicated process much simpler. All owners of the cross lease will have to agree to the conversion, which comes at a cost. Whether one owner wears that cost, or whether it is split between owners is a decision that has to be made by the parties involved.
Many property owners are opting to convert a cross lease title to a fee-simple structure in order to make it easier to sell their property, with a view to recouping the cost of the title conversion with an increased sales figure.
If you currently own a cross lease property and would like to realise the benefits of converting to a fee-simple ownership structure, CKL can help you. We will review the title and survey the existing property and advise you on planning, consenting, and engineering works which may be required, as well as manage the consenting process and council applications.
In some cases where shared driveways are in place, it may be necessary to bring the property up to standards required by today’s laws. This could vary in scale, from laying new sewer pipes, to upgrading a wall that separates two properties and replacing it with a fire-proofed wall in line with council regulations. The value in having CKL as your development partner comes into play here as our team of surveyors, planners and engineers liaise with Council to find solutions to any tricky problems or situations.
CKL has experience with hundreds of title conversions. If you are interested in learning more about unlocking the development potential of your property, please get in touch with us.
